9911796707
TMI Blog2020 (11) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... AM AND SHRI RAM LAL NEGI , JM Assessee by : Shri Suchek Achalia Revenue by : Shri Uodal Raj Singh ORDER Per Bench : These are cross appeals of the assessee and the Revenue against the common order of the learned Commissioner of Income Tax (Appeals)-10, Mumbai ( ld.CIT(A) for short) dated 30.10.2018. 2. The issue is sustaining of addition for bogus purchase @ 8% by the ld. CIT(A) as against 9% done by the Assessing Officer (A.O.). The assessee in its appeal has also challenged the validity reopening of the assessment and refusal by ld. CIT(A) to admit the additional evidence. 3. Brief facts of the case are that the assessee company is engaged in the business of import and export of diamond. In these cases assessment was reopened on the basis of information received from DCIT(Investigation), Mumbai that during the previous year, the assessee has taken the accommodation earlier in bogus purchase. The A.O. made 9% addition of the bogus purchase as under: A. Y. Amount 2008-09 59,70,604 2009-10 29,43,972 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. The rate of purchase made from undisclosed parties is much lower than the rate of credit purchases, on account of evasion of Income Tax and other taxes. Thus it is concluded that there is inflation of purchases in the books of the assessee and therefore the purchase rate as per purchase bills submitted by the assessee cannot be accepted. The assessee has contended that there is corresponding sales, but here the rate at which these items are purchased is unverifiable. The only course of action available is to ascertain a percentage of the cost on the purchases made from suspicious dealers, as the probable profit of the assessee. As mentioned earlier both the parties were involved in giving bogus bills in A.Y 2012-13 also. The then DCIT 5(2)(1) for the reason mentioned therein has made addition to be 9% of the total transaction made from bogus parties/hawala dealers. Hence, profit earned by the assessee on the purchases made from the suspicious dealers is estimated at 9% of such purchases. The transaction made with these parties is treated as bogus transaction, hence the enhance the profit to be 9% of the total transaction of made with the above concern's. 14.3. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier were produced. Finally he held as under: 8.3.31 Thus taking in to account the entirety of the facts, the profit embedded in accommodation entries of purchase of diamonds is estimated @ 8% of the purchase amount of ₹ 6,63,40,055/-for AY 2008-Q9and an addition of ₹ 53,07,204/- to the total income of the appellant is sustained. The appellant gets relief of ₹ 6,63,400/- (₹ 59,70,604/- minus 53,07,204/-). 8.3.32 For AY 2009-10, the profit embedded in accommodation entries of purchase of diamonds is estimated @ 8% of the purchase amount of ₹ 3,27,10,808/- and an addition of ₹ 26,16,865/- to the total income of the appellant is sustained. The appellant gets relief of ₹ 3,27,107/- (₹ 29.43,972/- minus 26,16,865/-). 8.3.33 For AY 2010-11, the profit embedded in accommodation entries of purchase of diamonds is estimated @ 8% of the purchase amount of ₹ 3,38,56,262/- and an addition of ₹ 27,08,501/- to the total income of the appellant is sustained. The appellant gets relief of ₹ 3,38,563/- (₹ 30,47,064/- minus ₹ 27,08,501/-). 8.3.34 For AY 2012-13, the profit embedded in accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. On the contrary, we notice that the assessee has proved the genuineness of purchases by obtaining confirmation letters in the form of affidavits from all the suppliers. The AO has done independent enquiry during the course of assessment proceedings by issuing notices u/s 133(6) of the Act to all the suppliers. We notice that the notices were duly served upon the suppliers and they have also responded by filing their replies duly confirming the transactions. The AO has rejected the replies by observing that the replies lacked details and they did not mention about the nature of transactions. In our view, the said observations are vague in nature. On the contrary, a perusal of the affidavits furnished by the suppliers would show that they have confirmed the sales effected by them to the assessee. Further they have also verified and signed the ledger account copies as available in the books of account. When the suppliers confirm that the transactions of sales made by them to the assessee are genuine, that too, in response to the notices issued by the AO u/s 133(6) of the Act during the course of assessment proceedings, in our view, the said replies cannot be rejected withou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
